25. If a corporation held by a marketable equity security for one year, the total return on investment forthis security would bea. the sum of the cash dividends for the year divided by the purchase price.b. the earnings per share on the stock for the year divided by the purchase price.c. the capital gain (loss) on the stock for the year divided by the purchase price.d. the sum of the cash dividends received plus any capital gain (loss) for the year divided by thepurchase price.

Answer: (d) the sum of the cash dividends received plus any capital gain/(loss) for the year divided…

Answered: 25. If a corporation held by a…

Cornerstones of Financial Accounting

4th Edition

ISBN:9781337690881

Author:Jay Rich, Jeff Jones

Publisher:Jay Rich, Jeff Jones

Chapter12: Fainancial Statement Analysis

Section: Chapter Questions

Problem 36MCQ

See similar textbooks

Similar questions

1. What is the profit for the year? 2. How many ordinary shares are outstanding? 3. What is the legal capital?
A. If a security offers a dividend amounting to P 5.23/ share and an investor purchased 200 shares at P 77.50/share, what is his Total Investment Return at the end of the year if the share price increased by 8%? Based on the given above, compute for the Dividend Yield Rate, Capital Gains Rate, and Total Investment Return Rate. Dividend Yield Rate: Dt+1/Pt = (P5.23+1/77.50) = 0.06748 or 6.748% Capital Gains Rate: (Pt+1-Pt) /Pt = 77.50 x 8%= 6.2 = 77.50/6.2= 83.7 = 83.7-77.50 = 6.2/77.50 = 0.08 or 8% Total Investment Return Rate: (Dt+1+Pt+1-Pt) /Pt = (5.23+1+83.7-77.50)/ 77.50 = 0.147 or 14.7%
Calculating Returns: Suppose a stock had an initial priceof $76 per share, paid a dividend of $1.95 per share duringthe year, and had an ending share price of $68. Compute thepercentage total return. What was the dividendyield? The capital gains yield?
4. Compute the total present value of dividends for National Co. as of the beginning of Year +1. Remember to adjust the present value for midyear discounting. (Dividend based valuation model) 5. Compute the value per share of National Co. as of the beginning of Year +1 using the dividend valuation model
1. Calculate the required rate of return on equity National Co. as of the beginning of Year +1 using CAPM 2. Calculate the sum of the present value of total dividends for Years +1 through +5. (Dividend based valuation model) 3. Compute the present value of continuing value as of the beginning of Year +1 using the dividend valuation model
Calculate the total cost (in $), proceeds (in $), total gain (or loss) (in $), and return on investment for the mutual fund investment. The offer price is the purchase price of the shares, and the net asset value is the price at which the shares were later sold. (Round your return on investment to one decimal place.) Return on Offer Total Net Asset Per Share Total Gain Shares Proceeds Investment Price Cost Value Dividends (or Loss) % 500 $10.80 2$ $12.80 $ $0.66 $ %
Calculating Return Components An investor purchases one share of stock for $50. After one year, they sell the share for $55. During the year, they receive $7 in dividends. a) What was the dividend yield, in percentage terms? b) What was the capital gain from price appreciation on the stock, in percentage terms? c) What was the total return in dollars? What was the total return, in percentage terms?
Anle Corporation has a current stock price of $19.49 and is expected to pay a dividend of $1.25 in one year. Its expected stock price right after paying that dividend is $21.26. a. What is Anle's equity cost of capital? b. How much of Anle's equity cost of capital is expected to be satisfied by dividend yield and how much by capital gain?
If current price of stock is $25 and you hold it for one year and received dividend of $2.5. You sold it at $27. How much return you received? Show dividend yield and capital gain separately.
A stock is bought for $21.00 and sold for $26.00 one year later, immediately after it has paid a dividend of $1.50. What is the capital gain rate for thistransaction? A. 4.76% B. 19.05% C. 11.91% D. 23.81%
Anle Corporation has a current stock price of $21.99 and is expected to pay a dividend of $1.00 in one year. Its expected stock price right after paying that dividend is $23.92. a. What is Anle's equity cost of capital? b. How much of Anle's equity cost of capital is expected to be satisfied by dividend yield and how much by capital gain? a. What is Anle's equity cost of capital? Anle's equity cost of capital is ☐ %. (Round to two decimal places.)
Anle Corporation has a current stock price of $19.71 and is expected to pay a dividend of $0.95 in one year. Its expected stock price right after paying that dividend is $21.84. a. What is Anle's equity cost of capital? b. How much of Anle's equity cost of capital is expected to be satisfied by dividend yield and how much by capital gain? a. What is Anle's equity cost of capital? Anle's equity cost of capital is %. (Round to two decimal places.) b. How much of Anle's equity cost of capital is expected to be satisfied by dividend yield and how much by capital gain? The dividend yield is%. (Round to two decimal places.) The capital gain is%. (Round to two decimal places.)

SEE MORE QUESTIONS

Recommended textbooks for you

Cornerstones of Financial Accounting

Accounting

ISBN:

9781337690881

Author:

Jay Rich, Jeff Jones

Publisher:

Cengage Learning

Intermediate Financial Management (MindTap Course…

Finance

ISBN:

9781337395083

Author:

Eugene F. Brigham, Phillip R. Daves

Publisher:

Cengage Learning

Principles of Accounting Volume 2

Accounting

ISBN:

9781947172609

Author:

OpenStax

Publisher:

OpenStax College

Cornerstones of Financial Accounting

Accounting

ISBN:

9781337690881

Author:

Jay Rich, Jeff Jones

Publisher:

Cengage Learning

Intermediate Financial Management (MindTap Course…

Finance

ISBN:

9781337395083

Author:

Eugene F. Brigham, Phillip R. Daves

Publisher:

Cengage Learning

Principles of Accounting Volume 2

Accounting

ISBN:

9781947172609

Author:

OpenStax

Publisher:

OpenStax College

Corporate Fin Focused Approach

Finance

ISBN:

9781285660516

Author:

EHRHARDT

Publisher:

Cengage

Financial Reporting, Financial Statement Analysis…

Finance

ISBN:

9781285190907

Author:

James M. Wahlen, Stephen P. Baginski, Mark Bradshaw

Publisher:

Cengage Learning

EBK CONTEMPORARY FINANCIAL MANAGEMENT

Finance

ISBN:

9781337514835

Author:

MOYER

Publisher:

CENGAGE LEARNING - CONSIGNMENT

SEE MORE TEXTBOOKS